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LETS GET DOWN TO BUSINESS.

Question :
Hey 11 months ago (about two years into our lease) our landlord started using a property manager. There was no discussion or consultation with us on this, in fact we only found out when the property manager contacted us to view the building, our landlord hasn’t contacted us since. We never informed that we’d be responsible for the payment of this service or informed what the fees would be. We’ve just received a bill for the previous 11 months and we’re in absolutely no position to pay it. We’ve been paying reduced rent since March due to taking such a hit from COVID-19, we are meant to go back to full rent this coming month but will struggle to pay that.  It is in our lease agreement that we’re responsible for “management fees” which isn’t something I was aware of until now so I have no idea what to do. Money is so tight at the moment that I don’t think we could even afford to pay it off via a payment and we’d also then need to factor the future bill into our monthly expenses which we also have zero room to do. It just feels impossible for us to get back on our feet and I’m afraid I’m going to have to close the business and file for bankruptcy.

Question submitted 23/09/20 @ 08:32pm
Industry: Property
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  • Hi there.

    I’m sorry to hear of your position and it is disappointing to hear the newly appointed property manager, nor the Landlord communicated to you this new expense was fully recoverable from you as the Tenant through your operating expense lease obligations. Given the significant hardship this will cause your current already stretched financial position, I would recommend meeting face to face with your Landlord and coming cap in hand stating you cannot simply afford to fund this additional cost at such a turbulent time. Given your Landlord has already offered you rent concessions, they have demonstrating their willingness to support you and hopefully this will be further demonstrated by working with you to keep your business afloat. Whilst it may appear your back is against the wall, you are in a strong position from a negotiation perspective in that you will not be able to meet these additional costs and the only other option is the Landlord may have an upcoming vacancy. The flipside of this is if you are paying a below market rental, the Landlord may have another Tenant up their sleeve, or feel the property is highly desirable etc. The best door is the front door on this one and by meeting face to face, hopefully they will be pragmatic about the unfortunate timing of engaging a property manager. If the Landlord really needs the property manager, they could offer to pay these costs, if it is a simple building to manage, they could also take back this responsibility and eliminate the cost altogether. Either way, a meeting in person should flesh out these points.
    Front foot this meeting and try do it swfitly to show you are being proactive about this.
    MOst importantly, good luck 🙂

    Hi there. Echoing Blair’s words.

    Ultimately every tenant/landlord relationship is different. And right now they are more important than ever to support each other for the ulitamte goal of sustainable tenancy for both parties!

    I suggest the face to face approach. Sit down and discuss your position with the Landlord and see what they can do to help.

    Companies like Blair’s and ours are avialable to help support these negotiations should you want to get in touch.

    All the best. Lloyd

    Hi there
    I completely agree with comments above. The best is a face to face, to further explain your situation and see if you can get relief until you get back on your feet. Failing that are you in a position to look for outside investment in the business.

    Good luck

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